[Direct answer]During the continuance of the marriage relationship, the income obtained from stock trading and fund purchases is classified as "investment income" as stipulated in Article 1062 of the Civil Code. In principle, it is marital joint property, and the parties should first negotiate the division of it upon divorce. If no agreement can be reached, the court will make a judgment based on the principles of considering the interests of the children, the wife, and the innocent party. According to Article 65 of the Interpretation (I) of the Civil Code on Marriage and Family by the Supreme People's Court, if the parties cannot agree on the division of securities such as stocks, bonds, and investment fund shares, or if it is difficult to distribute them at market prices, the court may distribute them proportionally based on their quantity. If one party conceals or transfers the joint property, the other party may claim that the former should receive a smaller share or no share at all. The division involves account inquiries and the selection of market value dates, so it is recommended to consult a lawyer as soon as possible.Divorce property division lawyerAnd apply for investigation and evidence collection. For more services, please refer to the relevant informationForeign-related legal services related to financial capitalAndBeijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 1062 of the Civil Code of the People's Republic of China (effective from January 1, 2021)

During the continuation of the marriage relationship, the wages and bonuses earned by the couple, the income from production and business investments, and the income from intellectual property are all considered marital joint property. Accordingly, the profits from investing joint funds in stocks and funds during the marriage belong to investment income, which is, in principle, jointly owned by both parties; even if the account is registered in one party's name, it does not change the nature of joint ownership. It is necessary to pay attention to the boundary with Article 1063 of the Civil Code: the financial assets purchased by one party before marriage belong to personal property, but the income generated from continued operation and transactions after marriage is a controversial point in this type of case. It needs to be determined based on the specific sources of funds and operating behaviors.

2. Article 65 of the Interpretation of the Supreme People's Court on the Application of the Marriage and Family Chapter of the Civil Code of the People's Republic of China (I) (effective February 1, 2021)

When the couple divides valuable securities such as stocks, bonds, and investment fund shares, as well as shares of unlisted limited companies, and they cannot reach an agreement through negotiation or have difficulties in distributing them at market prices, the people's court may distribute them proportionally according to their quantity. This article responds to the valuation difficulties caused by the price fluctuations of financial assets: rather than getting entangled in the market value at a specific point in time, it is better to allocate them proportionally according to their quantity, and each party shall bear the subsequent rise and fall in value. In practice, the two parties may also negotiate a discounted compensation, and the discounted base date shall be determined by the court based on the account transactions and appraisals.

3. The interpretation of the practical judicial cases

The court usually handles such division in three steps: first, verifying the basic information of the accounts and assets (the brokerage firm where the account is opened, balance, holdings, and transaction records); second, distinguishing between personal property and joint property (investments made before marriage and income earned after marriage); and finally, selecting the distribution method (discounted compensation or distribution based on the quantity ratio). Those who hide, transfer, or sell joint property may be awarded a smaller share or no share according to Article 1092 of the Civil Code. In practice, if one party transfers funds or liquidates and transfers assets before and after divorce, the court will make unfavorable determinations after verifying the facts. The most common pitfall is failing to apply for an investigation order, resulting in unclear basic information; focusing only on account balances while ignoring holdings and pending income; and neglecting to include loss-making holdings in the division process.

II. Henglue Law Firm's Practical Experience

Based on Henglue's practical observations in handling marriage and family matters and property division cases, the disputes over the division of stock funds focus on four types of situations: First, the pre-marital account and post-marital income are mixed together. One party claims that "all the money was bought before marriage", while the other party claims that the income from operations during the marriage is jointly owned. The court usually requires a detailed verification of the source of funds and transaction records. Second, one party liquidates assets, transfers funds, or transfers them to other accounts after the conflict escalates. It is necessary to track the bank and securities company transaction records and claim a smaller share or no share at all. Third, unlisted shares, held shares, and options, etc., have complex valuation and public disclosure procedures. Fourth, overseas accounts and cross-border assets involve double difficulties in investigation, evidence collection, and enforcement.

In terms of the judge's inclination, courts generally accept the scheme of distributing assets in proportion to their quantity to avoid disputes over the market value at a specific point in time. For compensation in the form of a discount, courts often use the book market value at the time of divorce litigation or the evaluation benchmark date for conversion. The most common mistake made by parties is not applying for a court investigation order and passively accepting the asset list declared by the other party, resulting in a serious reduction in the basis for division. Some people even transfer funds on their own, only to be counter-claimed by the other party for a smaller share.Divorce property division legal servicesThe core of it lies in: fixing the account evidence as early as possible, clarifying the scope of joint property, and designing a division plan that is favorable to oneself.

III. Frequently Asked Questions

Q1: If a person buys stocks before marriage, and the value of the stocks increases after marriage, does the increase in value count as joint marital property?

It is necessary to distinguish the nature of value-added. The principal and natural appreciation of stocks purchased before marriage belong to personal property; the income generated by one party's active trading during the continuance of the marriage relationship is often recognized by judicial practice as investment income under Article 1062 of the Civil Code, which belongs to joint property. Those who claim individual ownership should provide proof of the account opening time and the initial investment transaction records to demonstrate the source of funds; for accounts with frequent transactions after marriage for a long time, it is difficult to clearly distinguish between natural appreciation and investment income. The court will make a judgment based on the frequency of transactions and the source of funds.

Q2: What should I do if the other party conceals their stock fund account?

You can apply to the court for an investigation order or retrieve the other party's account opening and transaction information from banks and securities companies on their own initiative to clarify the account balance. It's more targeted to apply for investigation after obtaining clues (such as the name of the securities company and the record of fund transactions). According to Article 1092 of the Civil Code, if a party hides, transfers, or sells the jointly owned property, they may receive a smaller share or no share in the division of property; if the concealment is discovered after the divorce, the party may file a separate lawsuit to request a second division of property. Don't give up verification just because the other party "declares whatever they want".

Q3: At what price are stock funds split?

The pricing shall be determined through consultation between the parties. Commonly, one party will compensate the other party with a discount based on the market value at the time of division. If no agreement can be reached or if there are difficulties in distributing according to the market price due to significant fluctuations in market value, the court may distribute the assets according to the quantity and proportion as stipulated in Article 65 of the Interpretation of the Marriage and Family Code (I), and the parties shall bear the price fluctuations after the assets are allocated to their respective names. The discount reference date shall be determined by the court based on the time of litigation and the evaluation situation. If the parties have disputes over the time point, they shall submit evidence of the account market value. Loss-making positions also belong to the status of joint property and need to be included in the division together.

Q4: The fund has lost a lot of money. How will this be taken into account during the divorce proceedings?

The loss does not change the joint nature of the property: the floating loss position formed by the investment of marital common funds shall be included in the joint property and handled together according to the net value at the time of division. Both parties shall share the loss proportionally, and there is no automatic rule that "who operates, who bears the loss". If one party operates maliciously and causes losses, the other party may claim compensation separately. During the negotiation, the parties may agree that the loss-making position shall belong to the operating party, and the remaining assets shall be tilted towards the other party in a balanced manner. However, this should be fixed in a written agreement to avoid reneging on the agreement.

Q5: How much does it cost and how long does it take to split a stock fund?

In terms of fees, for divorce cases involving property division, the litigation fees are calculated cumulatively according to the value of the property. For the part exceeding 200,000 yuan, the fee is charged at 0.5%; the attorney's fees are determined based on the workload through negotiation. In terms of time, if the case is handled together with the divorce litigation, the time limit for the simple procedure is three months and for the ordinary procedure is six months. However, the time limit will be extended if it involves investigation and evidence collection or appraisal. For cases of divorce by agreement where the parties reach an agreement on property division, there is no litigation period. The earlier the account investigation is initiated, the shorter the overall process will be.

IV. Suggestions for Protecting Rights

  • If you discover that the other party is involved in stock trading or fund investing, collect the names of securities firms, account clues, and bank transaction records as soon as possible. Apply for an investigation order in the lawsuit to clarify the underlying facts.
  • Be vigilant against the other party concentrating on liquidating assets and transferring money before and after separation and litigation. Keep a record of the transfers and claim their reduced or no share in accordance with the law.
  • When both premarital investments and postmarital returns coexist, it is necessary to sort out the investment flow and operation records, and to estimate the boundaries between personal and joint property in advance.
  • For matters involving unlisted shares, nominee holdings, or overseas accounts, it is advisable to seek professional assistance as soon as possibleMarriage and family lawyerDesign evidence collection and partitioning solutions.
  • Whether it's a division by agreement or litigation, both should formalize the allocation results and obligations of cooperation in writing to prevent regrets after the fact and the failure of enforcement.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Financial capital legal services·Beijing Henglue Law Firm